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Will Obamacare Kill Jobs? More Fictions and Facts

— Fiction:No doubt, you’ve heard that Obamacare will cripple small businesses, the “engine of job growth in America.” In 2014 employers with more than more than 50 full-time workers will have to provide insurance—or pay penalties. If more than 30 of their workers go to the individual Exchanges and receive government subsidies in the form of tax-credits, the business will have to help cover those subsidies by paying a fine of $2000 to $3000 per employee.

Obamacare’s critics speculate that many employers will stop hiring, so that they have no more than 49 full-time employees.

And 99% of those with more than 50 employees already offer insurance. The employer mandate will affect just a tiny sliver of small companies. Lawmakers understood this when they wrote the legislation.

–Fiction: In 2014, many small employers will trim full-time workers’ hours and we will become a nation of part-time employees. Small business owners know that if they have fewer than 50 full time workers (averaging 30 hours a week) they won’t have to pay a penalty, and their workers can go to the Exchanges where individuals can purchase their own insurance, and receive those generous tax credits.

–Fact: This bit of fear-mongering overlooks the fact then when the government counts “full-time employees” it doesn’t just count heads, it counts hours.The law says that the firm must offer insurance if it has 50 full-time “or full-time equivalent employees.”

Here is how the rule works: If a business has 50 full-time employees working 30 hours a week and cuts 10 back to 15 hours, it will have only 40 full-time employees. But it will have to hire more part-timers to cover holes in the weekly schedule.

Assume the company hires 20 new part-time employees, each working 15 hours a week. Because they will be putting in 300 hours a week the government will count them as ten “full-time equivalents.” Add those ten to the remaining 40 full-time workers, and the company then will have 50 full or “full-time equivalent’ -employees.

The business won’t have to insure the 20 part-timerswho work only 15 hours, but it will have to insure the 40 who work full-time—or pay the penalty..

“Currently, 3,000 employees are classified as full time and 4,200 are part time. ‘Part-timers work a variety of hours, while those Cumberland currently considers full time — and eligible for medical benefits — must work 40 hours a week’ the company explained.

“Cumberland Farms has decided to schedule 4,500 of its employees so they work at least 32 hours a week and are eligible for health insurance. (Part-timers, meanwhile, will be limited to less than 30 hours a week.)

“‘We could have pushed everybody [now working] under 40 hours below 30,’ explained Ari Haseotes, president and chief operating officer of the company’s Cumberland Farms division. Instead, ‘we’re making a proactive effort here to go above and beyond, and clearly differentiate ourselves in the job market as a place to come to work.’”

2 thoughts on “Will Obamacare Kill Jobs? More Fictions and Facts”

Just to add to your article Maggie, here is what it means in Michigan:

“This decision will have profound implications for the hundreds of thousands of Michiganders who stand to gain health coverage if the state participates in the Affordable Care Act’s Medicaid expansion. But it will also affect the entire state. With the expansion, new federal funds—
more than $1 billion—become available. These funds would stimulate Michigan’s economy and support more than 10,000 jobs.” Families USA and Michigan Consumers for Health Care

And yet we have Michigan State Senator John Hune who will not sign up for it because it will add 500,000 more people to Medicaid who will drop their McDonald’s Insurance.